Pub lease

business_minded

Hey guys,
Sopme great advise been giving out so wondering what you all think about this. Probably going to lease a pub in dublin city centre, its run down at the moment adn part of the agreement is it that we renovate and tehn have to pay no key money. its in a super location but been closed 2 years and has to be totaly revamped to attract a godo crowd.
well what i need to do now is renovate on a shoe string of approx 50k, what we need with this is to renovate shop front approx 50 ft, get a kitchen in and modernise decor? am i mad? or do think its acheivable?
Then we need to market it , fodo adn drink, any ideas , help would be great,

misterq

I'm no expert, but 50k for that kind of job sounds low.
If you want to attract the right crowd, you need to put a lot of effort into the finish and getting it right on a shoestring could be very tricky.

Are you sure you are getting value for money?

I would be looking for at least a reduced rent if not a full rent holiday for the period of renovation, maybe for a few months more to make up for the cost and expense of renovation.

Maybe if you get this, then you could put more effort into the fit-out?
Bring the landlord on to your side. Make him/her see the sense of allowing you to do a top notch job of renovation rather than just making do. A successful renovation means you both win.

From the marketing point of view, you need to take a look at exactly who you are targeting your establishment at. Are you going for the food and drink market, concentrating on the quality of food and service to bring in the bacon or are you going for a trendy sort of a spot that is more reliant on drink sales alone?

Once you have a clear understanding of the market you are going for, then your marketing plan will start to come together.

It would make a lot of sense to bring in some expertise such as an Interior Decorator etc to make sure you get things right.

The bottom line: there are some businesses you can start on a shoestring, I don't think a pub is one of them.

Best of luck!

Nuttzz

50k sounds low to me for a complete refit, a fire alarm would set you back 5k alone, get pricing off suppliers before you go any further.

what about working capital to pay staff etc and buying stock in is that included in the 50k?

business_minded

Thanks guys,
Well we have 2 months rent free to get it renovated. After that well still have 50k working capital to get stock in, pay wages etc.
The market we are after is lunhces and fast pub grub at a good rate so we can get the numbers in over the couple of lunch hours. then after taht we will be looking for the young trendy people with cash to spend on drink, cocktails etc

Nuttzz

2 months rent free is nothing, it might take the 2 months to refit and then you got to start trading fairly close to break even straight away. this pub wouldnt be in the thomas street area would it?

antoinolachtnai

50 grand? Seriously? That would have been enough to do a 500 sq. ft. cafe in a slightly rustic style in 1996.

2 months (40 working days) is just too short a time. You would need to allow at least 4 months.

50 foot of shopfront (presumably this is a corner site) is going to cost you five grand just to get a contractor to paint. You can paint it yourself cheaper for sure, but you are going to be a busy guy. If there are any repairs to be done, the costs will just go up and up.

A kitchen alone is going to cost you the guts of 50k. You might have to apply for PP if you need to put in ducting. If you skimp on your refrigeration or hygiene, you're just going to get shut down and it's game over.

You need at least 5 grand a week to staff tha place realistically and you wouldn't want to be planning on doing much turnover for the first 4 weeks at least. Two weeks of stock is going to cost you 20 grand for sure. So the basic working capital alone is going to be 40k.

I'd say you're really looking at an investment of 250k here. I'd go back to the landlord and renegotiate. Either get a longer rent free period (like 1 or 2 years) or better still, get him to finance the refit and have the cost of the refit factored into the lease (250k over 20 years is going to add 20,000 or so a year onto your rent which isn't much really, if you're up and running).

If you are going to put your own money into it, I would at least try to get a rent freeze for 10 years. Then even if you go bust, you will have a valuable leasehold to sell.

If you read one book, I'd say you should read 'setting the table' by danny meyer (http://www.eire.com/2006/12/28/putting-community-in-business-danny-meyers-setting-the-table/)

This isn't a business I'm in, but I know it quite a bit. PM me if I can help.

(My guess is that this pub is a little further north than Thomas St., but I'm just guessing ...)

Best of luck with your venture anyway.

a.

antoinolachtnai

I talked to someone about this. He reckons it's possible to do up a pub on that budget, if you're really clever. It won't be glam, but it could still be cool. Don't know about doing full-service food though, that's another story. And time and money would definitely be very tight.